BMW government says would shut UK vegetation if Brexit hits provide chain

LONDON/FRANKFURT (Reuters) – BMW (BMWG.DE) would have to shut its Mini and Rolls-Royce vegetation in Britain if Brexit significantly disrupts its provide chain, an government on the German carmaker informed the Financial Times.

FILE PHOTO: The BMW emblem is seen on a automobile on the New York Auto Show within the Manhattan borough of New York City, New York, U.S., March 29, 2018. REUTERS/Shannon Stapleton

The warning follows issues voiced final week by the top of Siemens’ (SIEGn.DE) operations in Britain, who informed Reuters that the nation ought to keep within the European Union customs union, opposite to the British government’s coverage.

“We always said we can do our best and prepare everything, but if at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” BMW customs supervisor Stephan Freismuth was quoted as saying.

Around 60 % of the 378,000 Minis made by BMW final 12 months rolled off the manufacturing line in Oxford. Its factories in Swindon, Hams Hall and Oxford at the moment make use of round 6,300 staff to make BMW engines and Mini automobiles.

Airbus (AIR.PA) has additionally warned that British jobs could be beneath risk from a ‘no deal’ Brexit, drawing criticism from government ministers who mentioned such feedback undermined Prime Minister Theresa May’s negotiating place.

BMW’s Freismuth added that the company wished to maintain its British vegetation open and was engaged on contingency plans, however that any disruption to imports of parts would enhance prices and injury its ‘just in time’ manufacturing mannequin.

About 90 % of the components utilized in BMW’s British factories come from mainland Europe.

“If you have a stop for one day, it costs a lot of money, but at the end if there are more stops our management have to decide how this can be sorted,” he mentioned.

A BMW spokeswoman mentioned: “We remain committed to our manufacturing operations in the UK and continue to operate business as usual, as we work through a range of possible Brexit outcomes and their potential impact on our business.”

BMW nevertheless warned that the dearth of readability surrounding future customs preparations stays a trigger for concern.

“As previously stated, the ongoing uncertainty surrounding the Brexit negotiations is not helpful when it comes to making long-term business decisions,” BMW mentioned.

BMW’s just-in-time manufacturing system requires the free motion of components and items.

“Clearly if parts cannot physically get to a factory at the expected time, that factory will not run as smoothly and reliably as is desirable,” BMW mentioned.

A spokesman for the British government mentioned it was assured of securing cope with the EU that permits for the “most free and frictionless trade with our European neighbours”.

“We are working with the sector to put the UK at the forefront of new automotive technologies to ensure we remain the destination of choice for future investment,” he mentioned.

Reporting by David Milliken and Edward Taylor; modifying by Kate Holton and Alexander Smith

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